Chipotle Mexican Grill, Inc.

Second-quarter sales increased 9.3% to $3.3 billion. Comparable restaurant sales increased 2.2%, including transaction comp of 1%. Adjusted diluted EPS was $0.33, flat versus last year. Restaurant-level margin was 25.2%, down 220 basis points year over year. Digital sales were $1.3 billion, or 38.3% of total sales, versus 35.5% in the prior year. The company opened 101 new restaurants, including 80 Chipotlanes and 1 international partner-operated restaurant. For Q3, management expects comps around +1%, cost of sales just under 30%, labor in the mid-25% range, marketing in the low 3% range, and other operating costs in the mid-15% range. For full-year 2026, the company now expects comp sales growth in the low single-digit range, with price increases ending near the high end of the 1% to 2% range previously communicated.

Scott Boatwright said the second quarter showed the Recipe for Growth strategy is gaining traction, with transaction growth helped by menu innovation, stronger Rewards engagement, improved brand messaging and better restaurant execution. He emphasized throughput and hospitality as the core of the turnaround, highlighting broader linebacker deployment, HEEP efficiency gains, and ongoing training and accountability efforts. His tone was confident and constructive, while also acknowledging that the company is still early in several initiatives, including digital, brand evolution and new occasions like catering.

Adam Rymer framed Q2 as evidence that the strategy is working, but noted margin pressure from inflation and higher operating costs. He cited cost of sales at 29.7%, labor at 25%, other operating costs at 14.9%, marketing at 3% of sales, G&A of $190 million GAAP/$176 million non-GAAP, depreciation of $98 million, and an effective tax rate of 24.3% GAAP/24.0% non-GAAP. He also said the company ended the quarter with $800 million in cash, restricted cash and investments, bought back $631 million of stock in Q2 at an average price of $32.55, had repurchased over $1.3 billion year to date at an average price of $34.35, and had $1.7 billion remaining under authorization.

Analysts focused on whether Chipotle is doing too much to get 1% to 2% comps, the sustainability of LTO-driven gains, and how the company plans to get more loyalty participation in restaurants. Management said Honey Chicken performed better the second time around, LTOs typically drive hundreds of basis points of transaction lift, and loyalty enrollment tools already lifted daily in-store enrollments by nearly 20%; a frictionless in-restaurant Rewards payment experience is planned for August. On the near-term slowdown, Adam said traffic softened in the second half of July by about 200 basis points around the cyclospora issue, which is why Q3 guidance assumes about a +1% comp and the company is being cautious about how long the impact lasts.